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STATE BANK OF HYDERABAD ACT, 1956
79 of 1956
22nd December, 1956
STATEMENT OF OBJECTS AND REASONS "The Hyderabad State Bank is constituted under the Hyderabad State Bank Act (No. XIX of 1930 Fasli). Fifty-one, per cent. of the bank's share capital is held by the Government of Hyderabad and the rest by private shareholders. The State Government enjoys certain powers in regard to its management. The bank is functioning at present as the agent of the Reserve Bank for conducting Government business in the Hyderabad State. With the reorganisation of the
States, the offices of the Hyderabad State Bank conducting Government Treasury work will be distributed over three States, namely. Andhra Pradesh. Bombay and Mysore. It is necessary to provide (i) for the devolution on one single authority of the functions of the State Government of Hyderabad in relation to the bank, (ii) for the more effective performance by the Bank ;of the Government business as agent of the Reserve Bank, and (iii) for unified control and management of the bank in order to enable it to implement a programme of subsidised extension of banking facilities to the public. It is accordingly proposed that the shares of the Hyderabad State Bank should be vested in the Reserve Bank of India and compensation be paid to the existing shareholders at Rs. 94-4-6 for each share (of the face value of Rs. 100 0.S. in the now obsolete Hyderabad currency equivalent to Rs. 85-11-5 in Indian currency). 2. The corporate character of the existing Hyderabad State Bank is being retained but all the other provisions of the Hyderabad State Bank Act 1350 F.. are being repealed and replaced by more suitable provisions contained in the Bill. 3. The Bill makes certain consequential and incidental amendments in Reserve Bank of India Act. 1934. and in the Banking Companies Act. 1949." -Gaz. of Ind. 1956, Extra., Pt. II. S. 2, p. 799. An Act to transfer the share capital of the Hyderabad State Bank to the Reserve Bank of India and to provide for its proper management and other matters connected therewith or incidental thereto. WHEREAS in view of the reorganisation of States, it is necessary to provide for the devolution of functions of the State Government of Hyderabad in relation to the Hyderabad State Bank on one single authority; AND WHEREAS in order to secure the more efficient performance of banking and treasury functions by the Hyderabad State Bank as agent to the Reserve Bank of India and to enable the Reserve Bank of India to assist the Hyderabad State Bank, by the grant of subsidies or otherwise, to extend banking facilities to the public on a larger scale, it is expedient and necessary to provide for the transfer of the share capital of the Hyderabad State Bank to the Reserve Bank of India and for its proper management and for other matters connected therewith or incidental thereto: Be it enacted by Parliament in the Seventh Year of the Republic of India as follows:-
CHAPTER 01: PRELIMINARY
SECTION 01: SHORT TITLE AND COMMENCEMENT
(1) This Act may be called THE STATE BANK OF HYDERABAD ACT, 1956.
(2) It shall be deemed to have come into force on the 22nd day of October, 1956.
SECTION 02: DEFINITION
- In this Act, unless the context otherwise requires,-
(a) "appointed day" means the 22nd day of October, 1956;
(b) "Hyderabad Bank" means the Hyderabad State Bank renamed under sub-section (1) of section 3, as the State Bank of Hyderabad;
(c) "Hyderabad State Bank" means the Hyderabad State Bank constituted and incorporated under the Hyderabad State Bank Act, 1350 F.;
(d) "prescribed" means prescribed by regulations made under this Act;
(e) "Reserve Bank" means the Reserve Bank of India constituted under the Reserve Bank of India Act, 1034.
a[(f) "State Bank" means the State Bank of India constituted under the State Bank of India Act,
1955.]
CHAPTER 2 RENAMING OF THE HYDERABAD STATE BANK AND TRANSFER OF ITS SHARE CAPITAL TO THE RESERVE BANK
SECTION 03: CHANGE OF NAME OF HYDERABAD STATE BANK
(1) On the appointed day, the body corporate constituted by the Hyderabad State Bank Act, 1350F., and known as the Hyderabad State Bank shall be renamed as the State Bank of Hyderabada[**"].
b[(2) The said body corporate shall consist of the State Bank and other shareholders, if any, for the time being, of the Hyderabad Bank.
(2a) The Hyderabad Bank shall carry on the business of banking and other business in accordance with the provisions of the State Bank of India (Subsidiary Banks) Act, 1959, and shall have power to acquire and hold property, whether movable or immovable, for the purpose of its business and to dispose of the same.]
(3) The change of name of the Hyderabad State Bank by sub-section (1) shall not affect any rights or obligations of that Bank, or render defective any legal proceedings by or against it; .and any legal proceedings which might have been continued or commenced by or against the Hyderabad State Bank by its former name may be continued by or against it by its new name.
SECTION 04: HEAD OFFICE AND BRANCHES OF HYDERABAD BANK
(1) Unless otherwise directed by the Central Government by notification in the Official Gazette, the Head Office of the Hyderabad Bank shall be at Hyderabad.
(2) The Hyderabad Bank shall continue to maintain every branch and agency of the Hyderabad State Bank in existence immediately before the appointed daya[and shall not discontinue any branch or establish any new branch except in consultation with the State Bank and with the approval of the Reserve Bank.]
SECTION 05: TRANSFER OF SHARE CAPITAL OF HYDERABAD STATE BANK TO RESERVE BANK
On the appointed day, all shares in the capital of the Hyderabad State Bank shall be transferred to, and shall vest in, the Reserve Bank free of all trusts, liabilities and encumbrances.
SECTION 06: COMPENSATION TO SHAREHOLDERS OF HYDERABAD STATE BANK
(1) The Reserve Bank shall pay to the State Government of Hyderabad and every other person who, immediately before the appointed day, is registered as a holder of shares in the Hyderabad State Bank, as compensation for the transfer of such shares to the Reserve Bank under section 5, an amount calculated at the rate of ninety-four rupees four annas and six pies in Indian currency for each share of the face value of one hundred Osmania Sicca rupees.
(2) Notwithstanding the transfer of the shares in the capital of the Hyderabad Slate Bank to the Reserve Bank, any shareholder who, immediately before the appointed day, was entitled to payment of dividend on the shares of the Hyderabad State Bunk held by him shall be entitled to receive from the Hyderabad Bank all dividends declared by the Hyderabad State Bank in respect of his shares for any year which ended before the appointed day and remaining unpaid.
(3) Notwithstanding anything contained in the Hyderabad State Bank Act, 1350 F., no such shareholder shall be entitled as of right to any dividend on the shares of the Hyderabad State Bank held by him in respect of any period before the appointed day for which the Bank had not declared a dividend:
Provided that the Central Government may, in respect of any such period, authorise the payment of dividend at such rate as it may specify if it is satisfied that there is sufficient balance of profit available after such provisions and contributions for the purposes referred to in section 28 as the Reserve Bank considers necessary have been made.
(4) Nothing contained in sub-section (I) shall affect the rights inter se between the holder of any share in the Hyderabad State Bank and any other person who may have an interest in such share and such other person shall be entitled' to enforce his interest against the compensation awarded to the holder of such share but not against the Reserve Bank.
SECTION 07: CERTAIN OFFICERS OF THE HYDERABAD STATE BANK TO VACATE OFFICE
(1) Every person holding office as director (including the President and the managing director) or as deputy managing director, in the Hyderabad State Bank immediately before the appointed day, shall be deemed to have vacated that office on the appointed day, and notwithstanding anything contained in this Act or in any other law for the time being in force or in any agreement or contract, such person shall not be entitled to any compensation for the loss of office or for the premature termination of any agreement or contract relating to his employment, except such pension, compensation or other benefit, as the Hyderabad Bank may, with the previous approval of the Reserve Bank, grant to him having regard to what he would have received, if this Act had not been passed and if his employment had ceased on the appointed day in the ordinary course.
(2) Nothing in sub-section (1) shall be deemed to prevent the Hyderabad Bank from reappointing or re-employing with the previous permission in writing of the Reserve Bank, the managing director or the deputy managing director of the Hyderabad State Bank on such terms and conditions as are agreed upon between him and the Hyderabad Bank and are approved by the Reserve Bank.
SECTION 08: SPECIAL PROVISIONS REGARDING EXISTING OFFICERS AND EMPLOYEES
(1) Notwithstanding anything contained in any law or contract of service of other document, no appointment made or promotion, increment in salary, pension or allowance or any other benefit granted to any person by the Hyderabad State Bank after the 19th day of December, 1954, and before the appointed day which would not ordinarily have been made or granted or which would not ordinarily have been admissible under the rules or authorisations of the Hyderabad State Bank, or of any provident, pension, or other fund in force before the 19th day of December, 1954, shall have effect. or be payable or claimable from the Hyderabad Bank, or from any provident, pension or other fund or from any authority administering any such fund, unless the Reserve Bank has, by general or special order, confirmed the appointment, promotion or increment or has directed the grant of the pension, allowance or other benefit, as the case may be,
(2) Where any officer or other employee of the Hyderabad State Bank has, whether before or after the appointed day, received any amount by reason of any such appointment, promotion or increment or the grant of any such pension, allowance or other benefit, as is referred to in subsection
(1), which has not been confirmed or sanctioned by the Reserve Bank in pursuance of the powers conferred on it by that sub-section, such officer or other employee shall be bound to refund such amount to the Hyderabad Bank and that bank shall be entitled to take all such steps as may be necessary for recovering such amount.
(3) Where any managing director, deputy managing director or other employee of the Hyderabad State Bank has, after the 19th day of Dec. .1954, and before the appointed day, been paid any sum by way of compensation or gratuity, the Hyderabad Bank shall be entitled to claim refund of any sum so paid if the payment is not confirmed by the Reserve Bank by general or special order.
(4) Notwithstanding anything contained in any law for the time being in force, the renaming of the Hyderabad State Bank or the transfer of its share capital to the Reserve Bank shall not entitle any officer or other employees of that bank to any compensation to which he may be entitled under any such law, and no such claim shall be entertained by any Court, tribunal or other authority.
CHAPTER 03: CAPITAL OF THE HYDERABAD BANK
SECTION 09: AUTHORISED CAPITAL
(1) The authorised capital of the Hyderabad Bank shall be one crore of rupees, divided into shares of one hundred rupees each.
(2) Notwithstanding anything contained in this section, the State Bank may, with the approval of the Reserve Bank, authorise the Hyderabad Bank to increase or reduce its authorised capital:
Provided that, where the authorised capital is so increased, the shares issued shall be of the denomination specified in sub-section (1).]
SECTION 10: ISSUED CAPITAL
(1) The issued capital of the Hyderabad Bank shall, on the day on which the amendments to this Act made by the State Bank of India (Subsidiary Banks) Act, 1959, take effectb, he of such amount as the State Bank, with the approval of the Reserve Bank, may fix in this behalf, so however that the amount shall be so fixed as to consist only of fully paid-up shares of one hundred rupees each.
(2) All shares in the issued capital of the Hyderabad Bank shall, on that day, vest in the State Bank.
(3) Without prejudice to the provisions contained in sub-section (4), the Hyderabad Bank may, with the approval of the State Bank and the Reserve Bank, increase, from time to time, its issued capital and the capital so increased shall consist of fully paid-up shares to be issued in such manner as the State Bank may, with the approval of the Reserve Bank, direct:
Provided that the issued capital shall be so increased that at no time shall the State Bank hold less than fifty-five per cent of the issued capital of the Hyderabad Bank.
(4) The State Bank shall, as soon as may be after the determination, if any, of the amount of compensation by the Tribunal under the State Bank of India (Subsidiary Banks) Act, 1959, consider whether any increase or reduction of the issued capital of the Hyderabad Bank as fixed under sub-section (1) by way of adjustment by transfer from, or to, the reserves of the Hyderabad Bank or in any other manner, is necessary, expedient or appropriate and may, thereafter, with the approval of the Reserve Bank, direct the Hyderabad Bank to increase or reduce its issued capital.]
CHAPTER 04: MANAGEMENT OF THE HYDERABAD BANK
SECTION 11- 23 .
- [Repealed by the Slate Bank of India (Subsidiary Banks) Act. 1959 (38 of 1959), section 64 and
Schedule III, Pt. VII (1-10-1959).]
CHAPTER 5 BUSINESS TO BE CARRIED ON BY THE
HYDERABAD BANK
SECTION 24 24--26 .
- [Repealed by the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), Section 64 and
Schedule III, Pt. VII (1-10-1959).]
CHAPTER 6 RESERVE FUND ACCOUNTS AND AUDIT
SECTION 27: RESERVE FUND
(1) The reserve fund of the Hyderabad Bank shall, subject to the provisions of sub-section (4) of section 10, and sub-section (2) of this section, consist of-
(a) on the day on which the amendments to this Act made by the State Bank of India (Subsidiary Banks) Act, 1959, take effect, such sum as the State Bank, with the approval of the Reserve Bank, may determine, and
(b) after that day, the sum aforesaid together with such further sums as may be transferred to the reserve fund by the Hyderabad Bank out of its annual net profits before declaring a dividend.
(2) The State Bank shall, as soon as may be after the determination, if any, of the amount of compensation by the Tribunal, under the State Bank of India (Subsidiary Banks) Act, 1959, consider whether any increase or reduction of the reserve fund of the Hyderabad Bank is necessary by way of adjustment, by transfer from or to any account or towards provision for bad and doubtful debts, depreciation in assets, or contingencies or for any other purpose and may thereafter, with the approval of the Reserve. Bank, direct the Hyderabad Bank to so increase or reduce, its reserve fund.]
SECTION 28 --31 .
- [Repealed by the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), section 64 and Schedule III, Pt. VII (1-10-1959).]
CHAPTER 7 MISCELLANEOUS
SECTION 32--40 .
- [Repealed by the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), section 64 and Schedule HI, Pt. VII (1-10-1959).]
SECTION 41: POWER OF CENTRAL GOVERNMENT TO MAKE RULES
(1) The Central Government may, in consultation with the Reserve Bank, by notification in the Official Gazette, make rules to give effect to the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for,-
(a) the manner of, and the procedure for payment of, compensation under this Act, including the requirements subject to which the payment shall be made;
(b) the determination of persons to whom the said compensation shall be payable in all cases including cases where shares have been held by more than one person, or where they have been transferred before the appointed day, but the transfer has not been registered or where the shareholder is dead;
(c) the circumstances under which claims for payment of the said compensation from persons claiming through or under a shareholder may be entertained;
(d) the requirements to be complied with before receipt of the said compensation by a shareholder, whose share certificate has been lost, destroyed, mutilated. or stolen;
(e) the requirements, subject to which information regarding the payment of the said compensation may be granted or refused and the conditions subject to which such information may be given.
(3) All rules made under this section shall be laid for not less than thirty days before both Houses of Parliament as soon as possible after they are made and shall be subject, to such modifications as Parliament may make during the session in which they are so laid or the session immediately following.
SECTION 42:
[Repealed by the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), Section 64 and Schedule III, Pt. VII; (1-10-1959).]
SECTION 43: AMENDMENT OF CERTAIN ENACTMENTS
[Omitted by Act XXXVIII of 1959. Section .64, Schedule III, Pt. VII . (1-10-1959) and Repealed by the Repealing and Amending Act, 1960 ( 58 of 1960), Section 2 and Schedule 1 (26-12-1960).] .
SECTION 44: REFERENCES TO HYDERABAD STATE BANK IN OTHER LAWS
On and from the appointed day, any reference to the Hyderabad State Bank in any law (other than this Act) or in any contract or other instrument shall, except as otherwise provided in any general or special order made by the Central Government, be deemed to be a reference to the Hyderabad Bank.
SECTION 45:
[Repealed by the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), Section 64, Schedule III, Pt. VII (1-10-1959).]
SECTION 46: REPEAL AND SAVING
--[Omitted by Act XXXVIII of 1959. Section 64, Schedule III, Pt. VII (1-10-1959) and Repealed by the Repealing and Amending Act, 1960 (58 of 1960), Section 2 and Schedule I (26-12-1960).]
SCHEDULE 1
Declaration of fidelity and secrecy. (Repealed by the State Bank of India (Subsidiary Banks) Act, 1959
(38 of 1959), Section 64 and Schedule III, Pt. VII (1-10-1959).]
SCHEDULE 2
[Omitted by Act XXXVIII of 1959, Section 64, Schedule III. Pt. VII (1-10-1959) and repealed by the Repealing and Amending Act, 1960 (58 of 1960), Sec. 2 and Schedule I (26-12-1960).]
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